NEWS | EUROPE
Finanzlab takes advantage of peaks in volatility Finanzlab Multi Index Fund, a Swiss open-ended fund which invests in structured products, celebrated its first six months of existence on 20 April. few weeks and since the end of January 2022, the fund is about 94% invested. These initial investments were made in very defensive products using 50% barriers providing conditional capital protection, according to Vincent Bonnard (pictured), founding partner, Finanzlab. “By taking advantage of peaks in volatility and thanks to a very active search for the best price from numerous issuers, very attractive coupons of on average 7.32% per year were obtained,” said Bonnard. With the markets facing inflation, rising interest rates and the invasion of Ukraine, the fund was created in a very turbulent period, but its defensive nature has worked as expected. The objective of the fund is to provide an efficient investment in a diversified portfolio of barrier reverse convertible products linked exclusively to equity indices of the major developed countries (so-called multi-index products). The strategy implements a systematic sale of exotic options, thus capturing overvalued risk premiums. It aims for absolute capital growth. After its launch in October 2021, the initial investments were spread over a
“Despite sharply declining equity indices and high volatility, the cumulative advantage of very low barriers and the daily collection of coupons allowed the fund to post an impressive relative performance, and at the end of April the net asset value was down by only 1.99% year-to-date,” said Bonnard. In April, although most indices ended up being in the red, the fund proved its resilience with a NAV of CHF 97.87 on 29 April, down only 1.06% from the previous month.
Some 95.23% of the fund’s assets are invested in a portfolio of six structured products, including an Express Certificate on a basket comprising Eurostoxx 50, S&P 500, and SMI that is issued via Raiffeisen Switzerland. It offers an annual coupon of 6.5% and has an American barrier of 50%. It is also invested in a callable certificate from Banque Internationale à Luxembourg (BIL), which is linked to the Cac 40, Ibex 35, and Nasdaq-100. This product pays a monthly coupon of 0.633% providing all indices close at or above 50% of their starting price on the validation date. The product matures in November 2023 and is listed on the Six Swiss Exchange. Other issuers include Aargauische Kantonalbank (AKB), EFG, Postfinance, and Vontobel. The maximum exposure per issuer is 20%. The subscriptions and part of the coupons collected were invested during the month. The cash portion therefore slightly decreased to 4.77%. As of 30 April 2022, Finanzlab Multi Index Fund has CHF7.7m (€7.5m) assets under management (AuM). The fund was launched on 20 October 2021. There is no minimum subscription.
The cumulative advantage of very low barriers and the daily collection of coupons allowed the fund to post an impressive relative performance 4
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